Real Estate

HST Housing Rebates - Update

  • Last Updated:
  • Aug 1st, 2022 5:55 pm
[OP]
Jr. Member
Nov 15, 2019
108 posts
48 upvotes

HST Housing Rebates - Update

Hi All,

I am a lawyer focusing on HST Housing Rebates, and I posted an update a few months ago explaining that due to the COVID-19 situation, Canada Revenue Agency (CRA) had stopped processing and auditing HST Rebate Applications.

CRA is now processing and auditing HST Rebate Applications. However, there may be a backlog due to the volume of applications that were put on hold during the COVID-19 freeze.

Let me know if you have any questions. I am available to deal with any matter related to an HST Housing Rebate. Thanks.
116 replies
Sr. Member
Dec 19, 2010
920 posts
452 upvotes
If after possession of a new construction home within a year you choose to move (financial reason, work relocation etc), is HST payable at time of sale because the owner didn’t stay in the house at least a year (even though that was the intention when they took possession)?

And at what point is it determined if HST is payable- at time of sale of the home, when filing taxes the following year etc?
[OP]
Jr. Member
Nov 15, 2019
108 posts
48 upvotes
Each scenario has a different outcome based on the specific facts of the case. Living in a new construction for a short period of time may make you ineligible for the rebate. It all depends on the facts of the specific situation.

HST is payable at the time of the purchase of a property.
Deal Addict
May 23, 2006
1519 posts
544 upvotes
Vancouver
If someone paid GST or HST to buy a new detached house with a 1 bedroom legal suite.

Then, the 1 bedroom legal suite is used exclusive for rental, with the first rent lease agreement being 1 year or longer.

Is a proportional amount (e.g. sq feet of 1 bedroom legal suite/sq feet of entire house) of the GST or HST that was paid eligible for GST/HST New Residential Rental Property Rebate?


https://www.canada.ca/content/dam/cra-a ... 31-16e.pdf
Member
Oct 26, 2007
326 posts
197 upvotes
Fantastical wrote: If someone paid GST or HST to buy a new detached house with a 1 bedroom legal suite.

Then, the 1 bedroom legal suite is used exclusive for rental, with the first rent lease agreement being 1 year or longer.

Is a proportional amount (e.g. sq feet of 1 bedroom legal suite/sq feet of entire house) of the GST or HST that was paid eligible for GST/HST New Residential Rental Property Rebate?


https://www.canada.ca/content/dam/cra-a ... 31-16e.pdf
You would have already received the rebate from the builder (built into the price) given the majority of the house is your principal residence
Jr. Member
Mar 2, 2016
189 posts
105 upvotes
I purchased a preconstruction and closed on the property. With the intent of using as investment property. Had a lease agreement in place, they ended up losing their jobs due to COVID and so we mutually decided end the agreement. 1 month into looking for a new tenant we couldnt get it leased, so we ended up taking over as our principal residence. We paid HST upon closing. Am I entitled to receive the rebate?
Deal Fanatic
User avatar
Sep 8, 2007
9310 posts
10901 upvotes
Way Out of GTA
In all fairness you SHOULD be entitled... the question is are you?

The New Residential Rental Property Rebate (NRRPR) forms that you would complete if you paid HST upfront and file to claim the rebate asks for your purchase agreement, closing documents (stmt of adjustments) and copy of the lease. Presumeably you have the essential paperwork then to file for it. And you would probably get it but.... I think the fact that you didn’t rent it out might expose you to the CRA coming back at you.

Therefore I would simply claim upon closing that you decided to use a principle residence and file the New Housing Rebate (NHR) ....because they can’t says the first USE of the house wasn’t as principle residence. The language does talk about “intent at outset”. But given circumstances change, and as long as you can prove the first actual use is as principle it’s probably the safer rebate to file for. It’s just my best guess on how it would play out but perhaps the best route is to call the CRA Hotline with your question...it’s actually somewhat straightforward...and you don’t have to give your name. The will give you a basis on how to file correctly.
[OP]
Jr. Member
Nov 15, 2019
108 posts
48 upvotes
Raptorfan6 wrote: I purchased a preconstruction and closed on the property. With the intent of using as investment property. Had a lease agreement in place, they ended up losing their jobs due to COVID and so we mutually decided end the agreement. 1 month into looking for a new tenant we couldnt get it leased, so we ended up taking over as our principal residence. We paid HST upon closing. Am I entitled to receive the rebate?
It depends on the details. I have had situations where clients have paid the rebate on closing, and applied for it afterwards based on the property being their primary residence. CRA likes to look at the details such as proof that you moved to the property, that you were the first occupant of the unit, etc.
Deal Addict
May 23, 2006
1519 posts
544 upvotes
Vancouver
Bump, would appreciate your thoughts.
Fantastical wrote: If someone paid GST or HST to buy a new detached house with a 1 bedroom legal suite.

Then, the 1 bedroom legal suite is used exclusive for rental, with the first rent lease agreement being 1 year or longer.

Is a proportional amount (e.g. sq feet of 1 bedroom legal suite/sq feet of entire house) of the GST or HST that was paid eligible for GST/HST New Residential Rental Property Rebate?


https://www.canada.ca/content/dam/cra-a ... 31-16e.pdf
[OP]
Jr. Member
Nov 15, 2019
108 posts
48 upvotes
Fantastical wrote: Bump, would appreciate your thoughts.
I would have to look at the APS and the closing documents to determine how HST was treated in this particular transaction.
Jr. Member
Aug 27, 2012
133 posts
68 upvotes
Downtown Canada
Hi, I bought an investment property pre-con condo in 2014 and it just closed recently. For the HST rebate form under the FMV section, should I put the purchase price or what it actually goes for on the market?
Jr. Member
Sep 18, 2007
127 posts
12 upvotes
Toronto
Hi,

I've signed a 3 years leased back agreement with builder when i purchased the pre-con condo.
i've paid the HST upfront on closing and file The New Residential Rental Property Rebate (NRRPR).
However, CRA stated that due to the leased back agreement, I'm deemed as a builder instead of a landlord and I could not get the rebate.
This is a surprise to us and we have to pay HST over the FMV instead of the purchase price. Not only we could not get the HST back and we actually have to pay extra.
Have you see situation like that? Can you explain a little bit more?
Newbie
Jul 4, 2008
90 posts
11 upvotes
Mississasuga, ON
TorontoHSTRebates wrote: Hi All,

I am a lawyer focusing on HST Housing Rebates, and I posted an update a few months ago explaining that due to the COVID-19 situation, Canada Revenue Agency (CRA) had stopped processing and auditing HST Rebate Applications.

CRA is now processing and auditing HST Rebate Applications. However, there may be a backlog due to the volume of applications that were put on hold during the COVID-19 freeze.

Let me know if you have any questions. I am available to deal with any matter related to an HST Housing Rebate. Thanks.
Just a quick question.
Please look at the picture of GST524 form. What is the difference between B and C?
I'm a new condo owner and just took ownership from builder. The condo has been leased out to a tenant for 1 year.
The builder has provided a Net Sale Price on which I paid the HST and this should go in Line B as FMV

To me , Line C appears to ask the same question and will have the same amount. Why the duplication?
2020-07-13 14_40_51-gst524-fill-18e.pdf _ - Foxit Reader.png
[OP]
Jr. Member
Nov 15, 2019
108 posts
48 upvotes
As for the two questions regarding FMV, CRA asks for FMV and for the purchase price that you paid to the builder.

I cannot give specific guidance on what value is to be put down for FMV because each situation is different.
[OP]
Jr. Member
Nov 15, 2019
108 posts
48 upvotes
ciecie wrote: Hi,

I've signed a 3 years leased back agreement with builder when i purchased the pre-con condo.
i've paid the HST upfront on closing and file The New Residential Rental Property Rebate (NRRPR).
However, CRA stated that due to the leased back agreement, I'm deemed as a builder instead of a landlord and I could not get the rebate.
This is a surprise to us and we have to pay HST over the FMV instead of the purchase price. Not only we could not get the HST back and we actually have to pay extra.
Have you see situation like that? Can you explain a little bit more?
I'd have to look at the documents and the correspondence from CRA. Usually, CRA provides an explanation for their reasoning, and gives you time to provide a response.

I would recommend obtaining professional advice if your rebate is being denied, especially in this situation, where CRA is trying to charge you an additional HST amount.

[...]
Last edited by Mars2012 on Jul 13th, 2020 10:48 pm, edited 1 time in total.
Reason: not allowed
Jr. Member
Aug 27, 2012
133 posts
68 upvotes
Downtown Canada
TorontoHSTRebates wrote: As for the two questions regarding FMV, CRA asks for FMV and for the purchase price that you paid to the builder.

I cannot give specific guidance on what value is to be put down for FMV because each situation is different.
In other words, you are only here for solicit business instead of actually trying to help people?

You can't even give general guidelines without PMing people and asking if they need a lawyer?
[OP]
Jr. Member
Nov 15, 2019
108 posts
48 upvotes
TrainInsane wrote: In other words, you are only here for solicit business instead of actually trying to help people?

You can't even give general guidelines without PMing people and asking if they need a lawyer?
Each HST Rebate situation has a different set of facts. If general guidance is provided, it could be incorrect. It would not be responsible to do that.

The original post was an update informing readers that CRA is now processing HST Rebate applications again, and dealing with audits as well. The post offered to answer questions about the processing of HST Rebates, as this is something that can be dealt with on a more general level.
Jr. Member
Aug 27, 2012
133 posts
68 upvotes
Downtown Canada
TorontoHSTRebates wrote: Each HST Rebate situation has a different set of facts. If general guidance is provided, it could be incorrect. It would not be responsible to do that.

The original post was an update informing readers that CRA is now processing HST Rebate applications again, and dealing with audits as well. The post offered to answer questions about the processing of HST Rebates, as this is something that can be dealt with on a more general level.
Perhaps I have terrible reading comprehension, but I did not know "Let me know if you have any questions. I am available to deal with any matter related to an HST Housing Rebate." strictly meant the processing of HST Rebates.

For those who need help with the HST rebate, I found this guide helpful: http://www.realestateinvestmentcoach.ca ... pplication
Although as a CPA, I can tell you that CRA's definition of FMV means market value (how much the place would sell in the open market so your pre-con condo FMV would be much higher than the purchase price). However, I am unsure how often CRA would audit these FMV.
[OP]
Jr. Member
Nov 15, 2019
108 posts
48 upvotes
TrainInsane wrote: Perhaps I have terrible reading comprehension, but I did not know "Let me know if you have any questions. I am available to deal with any matter related to an HST Housing Rebate." strictly meant the processing of HST Rebates.

For those who need help with the HST rebate, I found this guide helpful: http://www.realestateinvestmentcoach.ca ... pplication
Although as a CPA, I can tell you that CRA's definition of FMV means market value (how much the place would sell in the open market so your pre-con condo FMV would be much higher than the purchase price). However, I am unsure how often CRA would audit these FMV.

That quotation is taken out of context. The original post is about how CRA is processing HST Rebate applications.
Member
Oct 22, 2007
450 posts
257 upvotes
Not sure if this is the right place to ask this question about GST/HST New House Rebate, especially in regard to 'at least one year period of primary residency'.

So, here's my question;
1. We bought a new condo in Toronto, and me & wify moved in right after occupancy date.
2. After six months, final closing is done with title registered.
3. After another 6 months, because of COVID19 pandemic, we have to move to other city for a new job, and selling the condo.
4. So, does CRA's primary residency period start at 'interim occupancy date', or 'after final closing with title registration'?

If it starts after 'final closing date', we may have to pay back HST rebate portion, right?

Thanks in advance for any insights.
Cheers.

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